This chapter is from the book

This chapter is from the book

Adding Items

An item is a description that appears on your purchase and sales forms. Services and products that you buy and sell are items, as are the charges related to those services and products, including discounts, freight charges, late fees, and sales tax. At any time you can add to your item list, increasing the number of items that can be entered on your company’s forms.

To create a new item, open the Item List by clicking Item List on the Lists menu or the Customers menu. Press Ctrl+N to open the New Item window.

Timesaver

You can also open the Item List from the Home page by clicking the Items & Services icon.

Select the type of item from the Type drop-down list. Your item type must be selected from one of the 10 categories offered in this list. Inventory Part has been selected in this example. Your screen might differ if you select a different item type.

Important

Be careful when selecting an item type. Most item types are permanent choices and cannot be changed after they’ve been selected.

Enter a name by which you will identify this item when you enter the item on purchase and sales forms.

If the item is to be a subitem of another item, check the Subitem Of box and enter the parent item.

Enter the description you use for this item on purchase forms such as purchase orders and bills.

In the Cost field, enter the amount you pay when you purchase this item. If the cost varies with each purchase, leave the field blank and enter the cost on the bill when you enter the actual purchase in QuickBooks.

Enter the account to which you will charge the expense for this item in the COGS Account field.

If you purchase this item from the same vendor time after time, enter the vendor name in the Preferred Vendor field. Otherwise, leave this field blank and enter the vendor name on the bill each time you purchase the item.

If you are creating an inventory item, in the Asset Account field, enter the account to which this item is added when purchases are made. This field might not appear, depending on the type of item you are creating.

If you are entering an inventory item, enter the number of the items necessary to trigger a reorder in the Reorder Point field. Enter also the quantity of items currently on hand.

Enter the description of the item as it appears on an invoice.

In the Sales Price field enter the amount you normally charge for this item. If the sales price varies with each sale, leave the price blank and enter the price on the actual invoice when the item is sold.

Indicate whether the item is taxable in the Tax Code field.

Enter the account to which income from the item’s sale is credited in the Income Account field.

You can type your choice or choose from the drop-down list. When you enter information in a field that contains a drop-down list, you have the choice of clicking on the arrow and choosing from the selections on the drop-down list, or you can type the entry in the field. If the entry you type does not appear on the drop-down list, QuickBooks gives you the opportunity to QuickAdd the new entry to your list.

QuickBooks offers a Unit of Measure inventory option. Click the Enable button in the Unit of Measure area of New Item window to define the unit of measure for an item. If the button doesn’t appear, turn on the Unit of Measure feature by selecting Edit, Preferences, Items & Inventory, Company Preferences, and clicking Enable. Define measurement units such as foot, yard, pound, or whatever is appropriate for the inventory item. Multiple units of measure allow you to purchase, store, and sell in different units. For example, a fabric store might purchase fabric by the bolt, count it in inventory by the number of yards on the bolt, and sell it by the foot, thus using a set of three units of measure.

Types of Items

QuickBooks gives you the option of creating ten types of items. Any items that you create must fit into one of these ten categories:

Service—Labor charges and professional fees.

Payment—Money received that reduces the amount owed on an invoice.

Inventory part—Merchandise your company purchases, keeps in stock, and resells.

Noninventory part—Products you sell but do not normally keep in stock or products you do not purchase (such as livestock that you raised or food dishes that you prepared).

Group—A group of related items that are saved as one item. Typically you sell the entire group as a whole, but you can also reserve the option to sell pieces of the group individually.

Discount—An amount of money subtracted from a total or subtotal cost of an item, such as a sale markdown or a reduction in sales price of a specific item.

Sales tax—A sales tax item calculates a sales tax at a specified rate that represents the amount you pay to a sales tax agency.

Sales tax group—You can combine related sales tax items, such as state, county, and city tax, as one group, and the group will appear as one item on an invoice.

Subtotal—This item serves the purposes of providing a subtotal on an invoice; you can use this subtotal in calculations.

Other charge—Items that don’t fit in the other groups, such as freight, finance charges and late fees, special handling charges, and rush charges are all considered to be Other Charge items.

QuickBooks Premier and Enterprise Solutions versions also provides an Inventory Assembly item for grouping parts into kits or pre-assembled parts.

Using Items on Forms

An item is a description that appears on your purchase and sales forms. An amount is associated with the item, and QuickBooks uses the amount to perform calculations on your forms. Things you buy and sell are items. Discounts you apply and services you perform are also items, as are the sales tax you charge and the cost of freight. You’ll find all the items listed in the QuickBooks Lists menu.

Customers, vendors, invoices, purchase orders, and accounts are not items. Items are services or products you sell or buy and the charges related to those services or products.

For an example of working with items, look at an invoice form. If you plan to invoice a customer for some construction-related labor, such as installation and repair work, you must first enter descriptions of the labor as items in QuickBooks. These are service items. Each of these items represents a type of service you provide and sell to customers. Other types of items are described in the “Types of Items” section that preceded this section.

To create your invoice, press Ctrl+I and enter the customer information. Click in the Item column and then click the drop-down arrow that appears. Click an item from the list, in this case Installation. If you entered a sales price when you created the item, the item description and rate per hour are filled in automatically. You can modify the descriptions on your invoice forms if necessary. For a service item, enter the number of hours charged to this job in the Amount column; the total amount for the invoice is calculated automatically.

Next, click the line under Installation and click the drop-down arrow that appears. Select Repairs from the list and then enter the appropriate number of hours. If a specific rate does not appear, enter the hourly rate you want to charge for these repairs. Modify the description if necessary.

Continue in this manner until all the items for this invoice have been entered.